Ontex Sees LFL Revenue Down 3% In FY 2020
Personal hygiene brand Ontex has reported a 3.1% decline in like-for-like revenue, to €2,2 billion, in its financial year 2020, impacted by lower sales in Europe.
Adjusted EBITDA for the fiscal year amounted to €236 million, down 3.9% compared to 2019, while adjusted EBITDA margin increased 55 bps to 11.3%.
Gross profit dropped 1.8% year-on-year to €609.1 million in the financial year ended 31 December 2020.
However, the gross margin improved significantly to 29.2%, registering an increase of 201 basis points versus 2019.
The company’s European division saw like-for-like revenue down 6.8% to €872.2 million, while its AMEAA arm ended the financial year 0.7% lower than 2019.
The decline in Europe resulted from a drop in demand from the company’s retail customers from the second quarter onwards, and a net negative balance of contract gains and losses.
Sales of retail brands were impacted by increasing online sales and competition from A-brands.
In the AMEAA markets, higher price/mix in all three categories – baby care, adult incontinence and feminine care – largely compensated for lower volumes.
Solid growth in Brazil and the US boosted revenues in the Americas region, while Mexico faced a contraction in demand due to the economic downturn caused by the pandemic.
The MEAA region saw a decline in sales, and the strong performance in Turkey could not offset lower sales in other geographies.
The company’s healthcare division saw sales up 0.1% driven as market share gains in self-pay channels, robust home delivery services, and e-commerce activity offset lower demand from hospitals and nursing homes.
The company reported a like-for-like revenue decline of 3.7% in the fourth quarter ended 31 December 2020.
The baby care segment saw a like-for-like revenue decline of 9.3% to €290.8 million, while the feminine care category saw a 9.9% decline to €50.0 million.
The adult incontinence segment reported like-for-like revenue growth of 8.6% to €175.8 million during the quarter.
Ontex CEO Esther Berrozpe, who assumed office on 1 January, has outlined new strategic priorities to restore growth and value creation.
These include, among others, simplifying the business and product portfolio, strengthening customer relations, refocusing R&D investments to accelerate the cadence of new product launches, and restoring manufacturing and service performance.
Berrozpe explained, “The company possesses a number of major assets that once realigned represent significant potential for value creation for our shareholders. Past initiatives have neither been sufficient nor have they delivered the expected benefits.
“We have already started work on setting our priorities for the future to return Ontex to growth, sustainable margins and cash generation with a solid financial structure.”
The company anticipates a low double-digit decrease of group like-for-like revenue in the first quarter of 2021 against the same period in 2020.
The company will focus on turning its strategic priorities into deliverable action plans in the context of increasing raw material prices.